This study uses a national agro-environmental production model to evaluate the environmental and economic impacts of introducing a market for corn stover to support a stover-based ethanol industry.
Prompted by volatility in oil markets, growing concerns about global warming, and an interest in supporting farms and rural communities through stronger agricultural markets, several groups in the United States have turned their attention to the potential for ethanol to alleviate our dependence on oil. The domestic ethanol industry has expanded rapidly in recent years, but in the United States, as in other countries, that development has relied heavily on government support. Until 2005, direct support was primarily in the form of tax incentives; the Volumetric Ethanol Excise Tax Credit (VEETC) provides blenders with a tax refund for blending ethanol with gasoline that has ranged between $.54 per gallon and $.45 per gallon. To further catalyze expansion of the renewable fuels market, Congress passed in the 2005 and 2007 energy bills a federal Renewable Fuels Standard (RFS) that mandates increased blending of renewable fuels into our fuel supply.
The sugars found in corn kernels are currently the predominant feedstock for the burgeoning ethanol industry in the United States. However, as increasing world food prices heat up the food versus fuel debate, and scaling up corn production for ethanol use raises environmental concerns (Marshall and Greenhalgh, 2006; Marshall, 2007), increased attention has turned to the potential for second-generation ethanol technologies to free the domestic ethanol industry from its dependence on corn grain. Advanced technologies such as cellulosic conversion, which would allow the production of ethanol from the complex sugars in leaves and stalks, promise to radically broaden the range of possible ethanol feedstocks. Potential future feedstocks include woody biomass such as forest residues, post-consumer municipal solid waste, and agricultural residues such as wheat straw and corn stover— the leaves and stalks that remain behind when corn grain has been harvested.
It is widely believed that cellulosic technologies will allow us to produce ethanol with a smaller environmental footprint than corn-based ethanol. In the expanded RFS passed with the Energy Independence and Security Act of 2007, the amount of corn-grain ethanol that can qualify for the RFS was capped to provide an incentive for the development of second-generation technologies such as cellulosic ethanol. Furthermore, the 2008 Farm Bill includes a cellulosic biofuels production tax credit of up to $1.01/gallon, on top of the VEETC described above, and a “Biomass Crop Assistance Program” that supports farmers as they establish and grow cellulosic biomass crops. As we advance policy to encourage cellulosic production, however, we cannot assume that “better than corn” means sustainable. Different feedstocks will have widely varying environmental footprints that must be understood and acknowledged within flexible biofuel policies that ensure sustainable outcomes. Designing such policies will require greatly increased investment in understanding the potential impacts of various proposed feedstocks, how producer decisions infl uence those impacts, and how producer decisions respond to policy and market incentives.